Carpet Cleaning Business Management

Executive Perspective: Addressing Industry Challenges

What is the biggest challenge or some of the biggest challenges facing the industry today and what are you doing about them?”

August 6, 2013
Trans

Every industry has its challenges, and when we were putting together this “People and Perspectives”-themed issue, we wanted to highlight some of issues that are particularly relevant to the cleaning and restoration industry. Who better to ask for input on this than the presidents, CEOs and higher-ups from some of the companies that are dealing with such issues each and every day?

We reached out to many of these higher-ups and posed one simple question: “What is the biggest challenge or some of the biggest challenges facing the industry today and what are you doing about them?”

Here’s a look at what Rob Hanks (Bridgewater LLC), Bill Bruders (Legend Brands), Glen Wilson (Prochem), Mickey McKee (HydraMaster) and Larry Haack (MasterBlend) had to say:

ROB HANKS: 

President, Bridgewater LLC

If you are still in business as we come out of this recession, you should be congratulated. If you are taking the time to read ICS and keep up with industry trends, you are definitely in the top tier of your industry. Here’s a look at some industry issues and how we are tackling them. 

Cost Cutting

Cost cutting seems to be a necessity for most and a hobby for some. The big question is where to cut. I will use chemical products as an example. There is a wide range of chemicals and prices in our industry, ranging from premium product to bathtub chemistry. The lesson of the ages still holds, “You get what you pay for.” As a manufacturer of premium chemicals this becomes a difficult question. You see, we have the technology to make some really cheap, crappy and even dangerous chemical that will cut a traffic lane like you can’t believe. But, in good conscience, can we do that? The answer is “no” for us. We have to consider safety of the technician, the homeowner and the carpet itself. We have to consider D.O.T. regulations, the EPA and the environmental regulations of different states. We would like to attract professional, repeat customers and making bad product won’t do it.  

Our hope is that the smart professional will take into account his percentage of chemical cost, dilution ratios, labor costs and his need to attract repeat customers himself. 

Shrinking Customer Base

The recession moved a lot of consumers to “make do.” They sometimes did without cleaning or moved to do-it-yourself mode. This scenario should improve as the economy recovers, however slowly. The good news is that there are millions of customers out there who have disposable income and there are two approaches to how get some of it.

  1. Hone you marketing skills to be able to attract the A-customer who has money to spend.
  2. Find other services that you can offer to your existing customers and ways that you can differentiate yourself.  Technology is improving to the point where it is easier to become expert in leather, stone, concrete, upholstery, commercial cleaning, etc. Do your homework and learn how to offer services that your customers are purchasing elsewhere. (By the way, this will help you with approach #1 as well.)

BILL BRUDERS:

CEO, Legend Brands

Over the last several years there’s been a gradual erosion of trust in our industry and it seems to almost be in direct proportion to the increased popularity of industry blogs and forums. This concerns me. I am not opposed to blogs, because many good ideas also get hatched, nurtured and shared. However they have also become a venue for self-proclaimed experts providing unreliable information, Pied Pipers touting “solve-all-your-problems” systems that promise everything and deliver next to nothing and sarcastic and unflattering references to manufacturers. No wonder there’s an atmosphere of distrust.

We’re a small industry. When we tear each other down, we tear the whole industry down. Divisions within are devastating. It’s time we start rebuilding trust. It’s time we relied on reliable sources of information and cultivated professional relationships across the aisle.
-Bill Bruders, Legend Brands CEO

At Legend Brands, we encounter this mistrust all the time. New approaches to old challenges are rejected almost out of hand. We get accused of being “just another money-grubbing mega corporation.” But Legend Brands is no GM! We represent about 200 employees and their families. Our innovations are the result of the hard work of intelligent and dedicated people who know this business inside and out.

One theme I keep hearing is that long-established manufacturers in our industry who are now owned by larger corporations only want your money - that they are only concerned with profits and don’t really care about their customers anymore. Slanderous and libelous accusations like “price gouging” and “false product claims” are freely thrown out, thereby fostering more distrust. 

The truth is dramatically different. We are just as concerned about producing good products, providing good value and standing behind them as the original private founder-owned companies were. It just makes good business sense. To be otherwise is going against good business practices and ethics, which is a proven recipe for eventual failure. 

We’re a small industry. When we tear each other down, we tear the whole industry down. Divisions within are devastating. It’s time we start rebuilding trust. It’s time we relied on reliable sources of information and cultivated professional relationships across the aisle. We’re always going to have our differences. But negativity, false accusations and bad dealings aren’t going to help. It’s time we started talking to each other again and put the emphasis on “professional” in the professional cleaning and restoration industry.

GLEN WILSON:

VP of Sales and Marketing, Prochem

Over the past several years, the biggest challenge for the industry has been the tough economic conditions. The housing crisis that started in 2009 had a dramatic effect on every business across the country and even across the world. Carpet cleaning was greatly affected as people were losing their homes, jobs and disposable income. 

At Prochem, we feel that when times get tough we need to focus on being the best at what we do in the industry. If Prochem offers the best overall solution, best product value, industry best quality partnered with superior service then we believe that the sales will come our way. Cleaners researching the purchase of new products are more discerning than ever before to ensure that their investment gets them the best value and this is our focus.

So, in turn, we invested in increasing our overall value to our customers.  We spent time getting ISO (9001 & 14001) certification in all our manufacturing facilities. This puts us in the same world class category as other industry leaders around the world. Investments were made in manufacturing technologies that would allow us to keep escalating production costs in check. R&D budgets were increased so we could continue to drive innovation. We also invested in our most valuable asset, our employees, by providing educational opportunities to increase skill sets. 

As the economy recovers, we feel we have positioned Prochem to be even better than before.

MICKEY McKEE:

VP of Sales, HydraMaster

As Winnie the Pooh would say, “Oh, bother.”  At least that is what it seems when we start discussing the future of vans for truckmounts.  

There is a lot of discussion surrounding what will happen when the new “uni-body” style vans appear in the marketplace. Can the manufacturers mount a unit to the floor?  Can you utilize a direct drive system? And so on, and so forth. There is a lot of misinformation already flowing through the industry which may be unnecessarily alarming many cleaners and restorers.

Rest assured that at HydraMaster, we are staying on top of this information and communicating with the proper companies and people. We will be making sure that you, the professional carpet, hard surface cleaner and restoration specialist are going to be supplied with quality equipment to meet your needs well into the future.  

In some ways, we welcome the new generation of vans because it spurs creative ways to adapt products that we believe may lead to greater efficiencies and cost savings for you, the end user.  For example, recently we have been installing our highly popular direct drive CDS truckmounts in compressed natural gas (CNG) converted vehicles that are cost effective due to the low price per gallon of CNG when compared to normal gasoline. HydraMaster has already worked on providing a solution to the Nissan-produced van, and is exploring options for other future OEM van design changes.  

Necessity is always the mother of invention, and these challenges as they come up will be no different, but I know the HydraMaster design team will measure up when it comes to putting a product on the market that the end user will find performs at a high level.

So, while there is much to do for us as a manufacturer to adapt our product to coming changes, let it be known that we are working on solutions so that we can continue to supply the marketplace with truckmounts that exceed the requirements of the most demanding cleaning and restoration professional.

LARRY HAACK:

Chairman and CEO, MasterBlend

I have been in the industry a number of years, as a distributor and currently as a manufacturer. Both businesses are rewarding and filled with challenges. I’d like to spend a little time talking about being a manufacturer, the changing landscape that has occurred with manufacturers in the recent past and where we seem to be headed in the future.  

I always remember my lunches with my good friend Ralph Bloss. Ralph always told me, “Larry, whatever you do, don’t get into manufacturing.” I always told Ralph, “Whatever you do Ralph, don’t get into chemical production.”  It was kind of a running joke between us, yet here I am doing both at MasterBlend.

The history of manufacturing in our industry is, unfortunately, littered with the remains of some very fine companies who produced very good equipment. We all remember Steam Genie, Steam Way, Power Clean and White Magic, just to name a few. I’m sure there are more companies that I overlooked, but this is a good sample. The fact of the matter is that manufacturing is a very tough business with a tremendous requirement of capital and low returns to the company. I’m sure our carpet cleaning customers believe that the manufacturers are making significant profits, but the fact is the profits are shared between the manufacturer and the distributor who sells, installs and services the equipment to the carpet cleaner. The problem has been that the profits to the manufacturer have not been high enough to sustain the businesses that eventually failed.  

The future of our industry seems to be interwoven with purchases by very large, well capitalized companies. Some of these companies are based in foreign countries and some are large, publicly traded companies. This seems to be an ongoing trend and makes it difficult for small, closely held companies like MasterBlend to compete with larger, well capitalized companies. To be competitive in this environment, small companies have to be innovative and respond to change and challenges quickly. This applies to manufacturers, distributors and carpet cleaners. The key to success is that we all have to accept the challenges of competition while responding to our customers’ needs.  

I have great faith in the future of our industry and the ability of the “small guy” to succeed.

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